Australia shares move narrowly with central banks in focus

Reuters Staff

4 Min Read

(Adds share moves, analysts comments)
SYDNEY, Dec 18 (Reuters) - Australian shares were nearly
flat on Wednesday morning as investors were reluctant to bet big
ahead of the outcome of the U.S. Federal Reserve meeting, while
the market found support from gains in big banks and miners.
On the domestic front, investors focused on comments from
Reserve Bank of Australia Governor Glenn Stevens.
In his twice-yearly parliamentary testimony, the central
bank chief hinted that there was no pressing need to cut
interest rates further in the near term, saying low borrowing
costs were working to support the economy.
He also said the bank had not done anything unusual in the
currency market recently, adding that a local dollar above 90
U.S. cents was not suitable for the economy.
"With recent Australian dollar weakness a key driving force
behind the selloff in Australian equities, a decision to taper
(from the Fed) will likely be a short-term bearish event for the
Australian dollar, and subsequently Australian equities," Tim
Radford, an analyst at Rivkin Securitites, said in a client
note.
The S&P/ASX 200 index inched down 1.4 points to
5,101.9 by 0038 GMT. The benchmark added 0.3 percent on Tuesday.
The Australian market has taken a beating in recent weeks,
having fallen some 350 points from a 5-1/2-year high of 5,457.3
hit on Oct. 28, as profit forecast downgrades and fears over
early Fed tapering hit local sentiment.
"It will be a very quiet trading day as most finalise their
positions ahead of the Fed meeting; tomorrow however will be a
very different story," said Evan Lucas, a strategist at IG.
MINERS, BANKS
Miners BHP Billiton Ltd rose 0.8 percent and Rio
Tinto Ltd climbed 0.9 market, supporting the broader
market.
Among the top banks, Australia and New Zealand Banking Group
rose 0.5 percent and National Australia Bank
added 0.4 percent. Commonwealth Bank of Australia edged
up 0.1 percent.
ANZ said at its annual general meeting that concerns about a
slowdown in China had been overdone and that the bank saw growth
in China of around 7.5 percent this year and 7 percent in 2014.
The bank said earlier that David Gonski would become the new
chairman in May 2014.
Packaging company Amcor Ltd tumbled 10.3 percent
after the demerger of Orora became effective, with Orora
expected to start trading later on the day.
Travel booking website Wotif.com Holdings Ltd
plunged 28 percent after it said its first-half net profit after
tax would be in a range of A$21.9 million to A$22.6 million,
significantly lower than its result a year
earlier.
Mining services company UGL Ltd fell 6.9 percent
after media reported the company might need a capital raising to
successfully demerge its DTZ property business.
Crown Resorts Ltd lost 0.9 percent after Sri Lanka
approved its $400 million complex along with two similar
projects without any explicit permission to operate casinos at
them.
New Zealand's benchmark NZX 50 index fell 0.7
percent to 4,694.6.
(Reporting by Maggie Lu Yueyang; Editing by Chris Gallagher)